Boardroom Blitz: The Four Things That Could Happen at Groupon

As AllThingsD had previously reported and Groupon CEO Andrew Mason confirmed in an onstage interview, there’s a bit of mishegas going on at the top echelons of the daily deals company over performance issues.

Today, the board is meeting in Chicago, a gathering that should be tense, given the rift between Mason and his co-founders, Groupon Executive Chairman Eric Lefkofsky and Brad Keywell, as well as worries from other directors about how the company has fared over the last year under Mason’s leadership.

Badly, if stock price is the judge (and it is), with shares down more than 80 percent since its IPO. Only recently did the shares move up on news of an investment by Tiger Global Management and then, ironically, on news this week of Mason’s possible ouster as top exec.

Until we know what conclusion the board comes to on this question, here are the four likeliest outcomes:

Mason quits: The fall-on-the-sword option is simple — Mason might decide that, for the good of the company and to end questions about him, he moves aside and hands over the reins. Mason himself cleverly addressed this in that interview at the Business Insider Ignition conference by noting that he would fire himself if he thought that was the best choice.

While a clever turn of phrase. Mason cannot actually fire himself — that is the board’s job. And while he, too, is on the board, he would have to recuse himself from any firing of himself.

So, his only real option in this scenario would be to quit. But will he? No one knows but him.

On one hand, in my experience, Mason is thoughtful enough to want to do so if he thought it was the right thing; on the other, after numerous discussions with him over the years, I think he does believe he is the right leader for Groupon.

Mason is fired: By the board, of course. This would be a drastic action and, to my mind, very unlikely. It would require a majority of the board and a very aggressive effort on the part of Mason’s critics. It would also damage the company by tossing out one of its key founders, who is arguably Groupon’s heart and soul and very much its creative spirit.

Firing founders and co-founder squabbles are always problematic (see Twitter) and usually never a good thing.

Mason moves to a new job and a new CEO is named: This seems like one reasonable course of action if cool heads prevail. That’s because if you talk to any significant Groupon investor — and I have talked to a lot — there is serious doubt about the company’s business model already and very little support for Mason himself.

But that does not mean he is not very valuable as a figure at the company, especially around product and culture. Could Mason take a key role in that area as did Larry Page and Sergey Brin of Google or Pierre Omidyar of eBay? Most definitely.

Mason keeps his job but gets lots of support: Another very viable option, by adding even more executive heft to the novice CEO. Groupon has already done that with the elevation of Kal Raman as COO, but it is still not enough. Mason needs a lot more help if he is to succeed, including from independent board members. Good candidates there are former AOL exec Ted Leonsis (and he knows from crisis), investment exec Mellody Hobson and American Express CFO Daniel Henry.

The problem for this option is that it puts an enormous amount of pressure on Mason to perform and does not remove the rancor between him and Lefkofsky and Keywell. If he bests his board detractors, he is going to have to succeed. Call it the put-up-or-shut-up option, but the onus will be squarely on Mason in this scenario. Which is just where it should be.

There is one final option, of course: Nothing will happen and Groupon will continue to stumble forward with a lot of questions lingering about its clearly wounded CEO and disgruntled board dynamics.

And, oh yes, they all have to work together to fix the business and restore investor confidence. There’s that.

More to come soon, obvi.

Until then and speaking of Illinois, here is the “Wayne’s World” version of the classic “Ballroom Blitz”:

When AllThingsD began, we told readers we were aiming to present a fusion of new-media timeliness and energy with old-media standards for quality and ethics. And we hope you agree that we’ve done that.

— Kara Swisher and Walt Mossberg, in their farewell D post

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